Guide to reducing outgoings post-Christmas

It’s no secret that for a lot of people payday just can’t come quickly enough in January as many are struggling after December’s early pay day.

It can feel good to get December’s money early but six weeks is a long time to wait until January’s wages, especially once the credit card bills start arriving.

Now Christmas is done and dusted, it might be a good time to start thinking about your finances in 2015 and how you may be able to improve your financial situation.

Did you know?

In September 2014, it was calculated that the average household debt, including mortgages, is approximately £55,223 and the average household credit card debt is £2,214, according to The Money Charity.

Just making a few changes to reduce your outgoings each month could have a big impact. For some people it could be the difference between paying bills on time and getting deeper into debt.

New Year, new you!

Ask yourself: Am I spending more than I earn? What can I realistically afford to spend?

2. Make some big changes:

See if you can save money by switching energy supplier/changing to a cheaper mobile contract.

Set up standing orders and Direct Debits to avoid potential late fees.

Ask your TV and mobile providers for a better deal. Suggest that you are considering switching to a rival company and see what they offer you.

When you get automatic renewal letters for things like car insurance and home insurance make sure you do some research and use comparison sites to get the best deal, or speak to a broker like our sister company, Think Insure. You could also ring your existing insurer and see if they will match the best price you find.

3. Make some small changes:

Food:

Look for cheaper alternatives in the supermarket. Opt for own-branded food and you could save around £20 a month.

Take a packed lunch to work instead of buying sandwiches from a shop or eating in the staff canteen. If you find yourself buying individual bars of chocolate/packets of crisps while you are at work, buy a multipack as part of your supermarket shop instead.

Why not try and do one big monthly shop and just a small top up each week? Often buying in bulk can save you money but make sure you need something before you buy it. Don’t be conned into buying multibuys if the items will go off before you get chance to use them, as this isn’t cost effective.

You could try growing your own fruit and vegetables. As well as saving you money in the long run, it can be very satisfying and fun for the whole family.

You could make batches of soup and stew to freeze, rather than buying tins every week. Homemade soup can be very tasty and full of nutrients.

Instead of eating out, learn how to cook and you could serve your family restaurant-quality food at home.

Hobbies:

Consider how much you spend on your hobbies per month. Is it money well spent? Is there a cheaper hobby you could take up instead?

If you have a gym membership, you could consider giving it up and taking up jogging or cycling instead. Your local park may have free outdoor gym equipment you could use. If you don’t feel able to stop the gym altogether, why not search for a cheaper gym in your area? If you are currently paying for a gym with a swimming pool, tennis, café etc. but never use these facilities, why not switch to a no-frills gym with a lower monthly cost?

Most people don’t consider playing the lottery a hobby, but if it’s costing you £2 a time, why not save the money instead?

Travel:

If having two cars in the household isn’t essential you could consider giving one up and sharing with your partner. This could potentially cut your costs by at least a third and you could make money back from the sale of the spare car. Alternatively, if you need two cars, you could consider downgrading.

Buying train tickets in advance or travelling outside of peak times could save you money.

Shopping:

To stop yourself overspending on non-essentials, why not leave your bank card at home next time you go shopping? You could always take a small amount of cash with you instead.

Don’t spend on store cards/catalogue accounts as they will usually have high interest rates.

Ask yourself, ‘Do I really need this?’ before you buy something.

Try to not buy things on impulse. If you can, leave it a couple of days and see if you still want it.

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